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Scout 12
December 29, 2023
Question

Writing off an old liability account

  • December 29, 2023
  • 2 replies
  • 0 views

I'm am new to a company and there are a couple of old vehicle liability accounts that need to be adjusted. One vehicle was stolen but still a few years ago but still on the books. Even though we had our taxes done for 2022, the tax accountant did not address this and the owner of the company wants me to go back and make a journal entry. I want to do the following and ask for guidance.

 

Create an expense account for gain and losses and move from the liability account to the new expense account. 

 

2 replies

R
rvrfrf
December 29, 2023

Thanks for becoming part of the Community, Scout.
 

To verify what you need to do with certain liability accounts, if you should use journal entries and create new accounts, etc. I'd recommend working with an accounting professional.
 

If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.
 

Here's how it works:

 

  1. Go to our Find a ProAdvisor page.
  2. Use the City or ZIP search field to specify a location.
  3. Select Find a ProAdvisor.
  4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

 

Once you've found an accountant, they can be contacted through their Send a message form:
 

  1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
  2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
  3. Hit Send message.

 

I've also included a couple detailed resources about working with journal entries and accounts which may come in handy moving forward:
 

 

If there's any additional questions, I'm just a post away. Have an awesome Friday!

Rainflurry
Rainflurry
December 29, 2023

@Scout 12 

 

"I want to do the following and ask for guidance.  Create an expense account for gain and losses and move from the liability account to the new expense account."

 

Are these loans on the vehicles?  The outstanding liability amounts have nothing to do with figuring gain or loss.  Gain or loss is determined by your basis in the vehicles and the amount received from insurance proceeds, FMV, or sale price, depending on how the asset was disposed of.  The liability generally reduces the cash you receive from the asset sale/disposal since the loan needs to be paid off from the proceeds of the insurance payout or the sale price.  Are the assets still on the books or is it just the two loan payable liability accounts?    

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